Euro Area Economic Sentiment Highest Since 2023

The Eurozone Economic Sentiment Indicator (ESI) fell for the third consecutive month to 93.0 in April 2026, hitting its lowest level since November 2020 and missing market expectations of 95.2, reflecting growing concerns over the economic outlook, driven by the escalating Iran war. Sentiment worsened across all sectors, with the sharpest drops among consumers (-20.6 vs. -16.4 in March), service providers (0.9 vs. 4.1), and retailers (-9.9 vs. -7.6). Confidence also dipped for manufacturers (-7.7 vs. -7.0) and constructors (-2.4 vs. -2.1). Among the largest EU economies, the ESI fell notably in Germany (-3.9), France (-3.0), Italy (-2.8), and the Netherlands (-2.5), while Spain saw a more modest decline (-0.9). On the pricing front, consumer inflation expectations rose 5.6 points to 49.1, the highest level since April 2022, while manufacturers’ selling price expectations increased 10.2 points to an over three-year high of 31.1.

The Eurozone Economic Sentiment Indicator (ESI) dropped to 96.6 in March 2026, down from a revised 98.2 in February and missing market forecasts of 96.8. The decline was fueled by rising inflation expectations tied to the Middle East conflict, with consumer confidence plunging (-16.3 vs. -12.3) as inflation fears surged 17.2 points to 43.4, the highest since July 2022. Retailer sentiment also weakened (-7.2 vs. -5.2), while service sector confidence held steady (4.9 vs. 5.0). Manufacturers saw a slight improvement (-7.0 vs. -7.2), though their selling price expectations jumped 7.4 points to 19.7, the highest in three years. Construction sentiment edged up (-2.0 vs. -2.2). Among major economies, the ESI fell sharply in France (-3.7) and Spain (-2.4), with notable declines in the Netherlands (-1.5) and Italy (-1.3), while Germany remained stable (-0.1).

The Eurozone Economic Sentiment Indicator (ESI) fell to 98.3 in February 2026, down from a three-year high of 99.3 in January and below market expectations of 99.8. Sentiment weakened among service providers (5.0 vs 6.8), manufacturers (-7.1 vs -6.8), and construction firms (-2.1 vs -1.3). Consumer confidence (-12.2 vs -12.4) and retailer sentiment (-4.5 vs -5.7) showed modest improvement. Among major economies, the ESI declined sharply in France (-2.8), followed by Italy (-0.6), while remaining broadly stable in Spain (±0.0), Germany (-0.2), and Netherlands (-0.2). On the pricing front, consumer inflation expectations rose 1.6 points to 25.8, while manufacturers’ selling price expectations increased 1.2 points to 11.5, highlighting ongoing inflationary pressures.